Monthly Archives: October 2016

Indian Steel Export Offers – Week 44

We at SteelMint have evaluated Indian steel export offers to global market during week 44 along with weekly price analysis.

Steel export offers during week 44

Particular Grade Size Delivery 29-Oct 22-Oct
Iron Ore 58/57% Fines FOB East Coast $36-37 $33-34
Mill Scale 70/68% Fines FOB West Coast $44-45 $43-44
Pig Iron Steel Grade Lumps FOB East Coast $270-280 $270-280
Billet IS 2831 150*150mm FOB East Coast $330-335 $330-335
Billet IS 2830 100*100mm FOB East Coast $330-335 $330-335
Slabs SAE1006 220-260mm FOB East Coast $340-345 $340-345
HRC SAE1006 2-5mm FOB West Coast $435-440 $430-435
CRC SPCC 0.9-1.0mm FOB West Coast $500-520 $480-500
Plates A 36, S235 10-20mm FOB East Coast $410-420 $410-420
Silico Manganese HC 60-14 Lumps FOB East Coast $860-880 $820-840
Ferro Manganese HC 75% Lumps FOB East Coast $800 $760

Prices in USD/MT
Source: SteelMint Research

Trade highlights

1. Chinese spot iron ore prices increase this week.                                        

2. Indian pellet (64% Fe ) export deal concluded at around USD 91-92/MT CFR China through tender.

3. Indian exporters hold slab export offers owing to better realisation in domestic market.

4. Indian plate export offers at USD 480-490/MT CFR Europe , equivalent to USD 445-455/MT  FOB India, however no deals were reported.

 

Factors to Decide Indian Iron Ore Prices for Nov’16

Amid declining sponge prices, Odisha based merchant iron ore miners maintained their offers at same levels in 2nd half of Oct’16. Dull demand in finished steel products has pulled back sponge iron prices. However majority market participants are optimistic that prices may rise post Diwali holidays ending 2nd Nov’16. It appears that miners are in ‘wait and watch’ mode and are likely to open prices later in 1st week of Nov’16.

Amid rise in coking coal and iron ore prices in global market, India’s domestic market is also expected to improve. Miners may open iron ore price after 5 Nov’16.

Key highlights that will govern iron ore prices for Nov’16 –

1. Chhattisgarh based sponge plants’ iron ore sourcing from NMDC remains stable – C.G. based units have sourced 64 rakes in Oct’16* from NMDC (C.G.). Last month they procured 64 rakes. NMDC had increased iron ore prices by INR 300-460/MT M-o-M in Oct’16 post sharp hike in sponge prices in September and decent deliveries.

2. KIOCL sourced 23 rakes of fines in Oct* from NMDC – Mangalore based pellet maker – KIOCL sourced 23 rakes from NMDC (C.G.) in Oct’16* against 22 rakes in Sept’16.

3. JSW Steel’s sourcing from NMDC stable, increases from Odisha – JSW Steel has procured 34 rakes from NMDC (C.G.) in Oct’16*. Last month it sourced 33 rakes. From Odisha the steel maker has increased its iron ore sourcing from 0.27 MnT in Sept’16 to 0.28 MnT in Oct’16*.

4. RINL’s sourcing from NMDC moves up significantly – Vizag steel sourced 127 rakes of iron ore from NMDC (C.G.) so far in this month. Last month it procured 117 rakes.

5. NMDC’s movement for export moves up sharply – NMDC loaded 79 rakes for export in Oct’16* compared to 49 rakes last month.

6. Domestic sponge iron prices plunge – Sponge iron prices declined sharply in Oct’16. In central India prices fell by INR 1,000-1,300/MT M-o-M and in eastern India prices fell by INR 600-700/MT M-o-M.

7. Iron pellet prices under pressure- Pellet manufacturers are seen selling pellets under pressure in Odisha and central India. Central India sponge manufacturers mentioned buying iron pellet at INR 4,350/MT FOR Raipur from Odisha with qty 9,000 MT under advance payment. Raipur (CG) pellet prices are at INR 4,600-4,800/MT (ex works).

However east based pellet manufacturer continue to exporting pellets at USD 91-92/MT, CFR China.

8. Global iron ore prices rise significantly – Seaborne iron ore prices in China moved up sharply by USD 8/MT M-o-M and touched USD 64/MT, CFR China for Fe 62% fines. Expensive coking coal and coke has forced Chinese steel mills to go for high grade material usage which has lifted lump and pellet premium.

Note:- Oct’16 data updated till 28 Oct’16

 

India: SAIL to Export 18,000 MT Pig Iron

Indian Pig iron exports remained almost nil in the past 2 months due to high domestic demand. Indian Pig iron exporters are offering their material in the domestic market with better realization as compared to what they have attracted from exports.

A bulk vessel named Neslead Albion of 18,000 MT has been recorded at Haldia Port (India’s east coast), which is expected to reach the port on 29 Oct’16.

According to sources, the cargo is likely to ship to Bangladesh. The company’s last Pig iron export vessel was shipped in the month of Aug’16 for 18,000 MT Pig iron. The cargo was shipped to Bangladesh and the deal was concluded at around USD 230-235/MT, FoB Haldia Port.

Another major Pig iron exporter, MMTC has exported 15,750 MT Pig iron in the month of Aug’16. The deal was concluded at USD 240/MT, FoB Paradip Port and shipment was made to Bangladesh.

 

Korea: KOWEPO Invites Tender for Purchase of 440,000 MT Steam Coal

Korea Western Power Company Limited (KOWEPO) has published a tender for the purchase of 440,000 MT steam coal for its TAEAN Power Plant, Korea. The material is divided in to 4 lots of 110,000 MT each for shipping on FOBT basis.

Each shipment of coal to be purchased by the company should be entirely supplied from the homogeneous coal. Multiple mines coal shall also be allowed only if it is from homogeneous.

The offer given by the bidder against this tender will be valid only for the 3 days from the date of tender closing. Although KOWEPO may request the bidder to extend validity period, if necessary.

Specification

Total moisture (as received basis): 15% max
Ash (air dried basis): 17% max
Net calorific value (as received basis): 5,700 kcal/kg min
Ash fusion temperature: 1,200°C min

Note: Chinese and Far East Russian coal are not allowed in this tender.

Due date (Korean Standard Time)

The due date for bid submission is 4 Nov’16 till 10:00 hrs.

 

Excessive Vessels Put Bulk Shipping Freight Rates Under Pressure

Bulk shipping freight rates have come under the pressure of excess vessels against demand.

Cargo vessels have become surplus in comparison with demand. Despite shipments of Coking Coal from Australia to China and India, freight rates have not undergone any improvement, according to inputs received.

Market participants speculate the freight rates to go down in the next week due to the availability of excessive vessels, and seasonal slowdown to begin.

Current freight rates (coal cargoes)

Route Supramax Panamax Capesize
Australia to India 13 11 9
South Africa to India 10 9 7
Indonesia to India 7 8 5

Freights in USD/MT
Source: SteelMint Research

Current freight rates (iron ore cargoes)

Route Supramax
India to China 9

Freights in USD/MT
Source: SteelMint Research

On Friday, the Baltic Dry Index was recorded at 834 points. There was no significant rise in the index due to the bearish sentiments prevailed in the industry. The index is an indicator of movements in global cargo shipping freight rates in respect to all classes of vessels, transporting all kinds of commodities, including coal and iron ore.

 
bar & rod

Indian Bar and Rod Production Fall in Sep’16 M-o-M

India’s bar and rod production by leading producers fall sharply by 9%. While, mini & others producers’ production up by about 3% in Sep’16 against Aug’16, as per Steel Ministry.

As per the Steel Ministry monthly reported data, India’s total bar and rod production in Sep’16 stood at about 2.82 MnT compared to 2.85 MnT in Aug’16. Production fall by 1% M-o-M.

If we analyze, the leading steel producers like RINL, JSW steel, JSPL has reported a fall of production while SAIL production has marginally increased in Sep’16 as against Aug’16. On the other hand mini & others producers has also registered a marginally increased of about 3% to 1.97 MnT in the same duration.

On a cumulative basis during Apr-Sep’16, India’s bar and rod production by all leading steel producers decreased by around 12% compared to corresponding period in the previous year. While, mini & others producers marginally up 0.5% in the same period.

India’s bar and rod production during Apr-Oct’16

Month SAIL RINL TSL JSPL JSWL Total ISP M-o-M Mini & other producers M-o-M Total Production
Apr’16 1,89,000 1,82,000 2,41,000 74,000 2,26,000 9,12,000   18,40,000   27,52,000
May’16 1,90,000 2,41,000 2,66,000 69,000 2,33,000 9,99,000 +9.50% 21,10,000 +14.7% 31,09,000
June’16 1,83,000 2,45,000 2,47,000 40,000 2,20,000 9,35,000 -6.40% 19,90,000 -5.7% 29,25,000
July’16 2,02,000 2,16,000 2,49,000 45,000 2,28,000 9,40,000 +0.5% 17,27,000 -13.2% 26,67,000
Aug’16 1,89,000 2,40,000 2,62,000 56,000 1,89,000 9,36,000 -0.4% 19,17,000 +11% 28,53,000
Sep’16 1,92,000 1,89,000 2,63,000 46,000 1,62,000 8,52,000 -9% 19,75,000 +3% 28,27,000
Total(Apr-Oct’16)* 11,45,000 13,13,000 15,28,000 3,30,000 12,58,000 55,74,000   95,84,000   1,51,58,000
Total(Apr- Oct’15)* 13,49,000 14,01,000 17,71,000 4,91,000 13,02,000 63,14,000 -11.7% 95,32,000 +0.5% 1,58,46,000

* Compared to Year-on-Year (Y-o-Y)
Quantity in MT
Source: JPC – Steel Ministry

 

Global Iron Ore Prices Reach USD 64/MT

Global iron ore prices are witnessed at USD 64.1/MT, CFR China as on 28 Oct’16. Prices were up as there is a strong demand for iron ore from Chinese mills as they want to complete their projects before the winter season sets.

In addition, surging coking coal prices have also lifted iron ore prices as Chinese buyers prefer using high-grade material over the low grade in order to minimize the usage of coking coal. Alongside, there is also supply shortage of high-grade iron ore at some Chinese ports which also drove up iron ore prices.

It is to be noted that some mills have started to put blast furnace under maintenance due to high coal prices.

The increase in coking coal and coke prices has benefited Fe 62% and Fe 65% iron ore products while it remained un-benefited for Fe 58% iron ore product which is majorly imported by India. Currently, Chinese buyers are also looking for a heavy discount for low-grade ore.

Few market participants believed that for the coming few weeks iron ore prices may follow uptrend as coking coal and coke market is on the higher side.

global-iron-ore-prices-as-on-28-oct16

 

India’s Flat Steel Imports Down by 9% at Kandla-Mundra Port in Sep’16

In Sep’16, India’s HRC, CRC and Plates imports at Kandla-Mundra port have registered a fall of 9% against imports in previous month of Aug’16.

India imported about 10,034 tonnes of HRC (was 35,566 tonnes in Aug’16), 6,320 tonnes of CRC (was 2,536 tonnes in Aug’16) and 19,450 tonnes of Plates (was 118 tonnes in Aug’16) at Kandla & Mundra port.

This month-on-month fall in flat products import signals the subsequent impact of various trade restrictions such as MIP and anti-dumping duty.

In Sep’16, highest HRC importer at Kandla-Mundra port was Bhushan Steel which imported 7,789 MT of HR coils from Japan at Kandla port.

In case of CRC, Maruti Suzuki India Ltd imported highest quantity, 6,050 MT from Japan/Korea. Whereas, in case of plates, Wellspun India booked total of 18,7055 MT from Germany and France at Mundra port.

HRC Import at Kandla-Mundra Port in Sep’16

Importing Company Port name Exporting country HS Code Qty in MTS
Bhushan Steel Kandla Japan 72083830 3,434
72083890 4,269
72083890 37
72083990 49
Jindal Saw Ltd Mundra Korea 72083690 1,865
Maruti Suzuki India Ltd Kandla Japan 72082790 73
Rajasthan Prime Steel Processing Centre Kandla Japan 72082730 70
72082630 61
Surya Global Steel Tubes Ltd Kandla Japan 72083890 65
72083790 111
Total       10,034

Source: SteelMint Research

CRC Import at Kandla-Mundra Port in Sep’16

Importing Company Port name Exporting country HS Code Qty in MTS
Maruti Suzuki India Ltd Kandla Japan/Korea 72091790 5,453
Mundra Japan 597
Meshco Steels Kandla Korea 72091890 188
Rajasthan Prime Steel Processing Centre Kandla Japan 72091620 8
Baosteel India Pvt Ltd Mundra China 72091690 22
POSCO India Ahemdabad Steel Processing Pvt Ltd Mundra Korea 72091790 52
Total       6,320

Source: SteelMint Research

HR Plates Import at Kandla-Mundra Port in Sep’16

Importing Company Port name Exporting country HS Code Qty in MTS
Wellspun India Corp Mundra Germany/France 72085110 18,705
Jindal Saw Ltd Mundra China 72085110 745
Total       19,450

Source: SteelMint Research

 

Goa Iron Ore E-auctions in Oct’16 – A Snapshot

This month witnessed two iron ore e-auctions in the state of Goa. 3.7 MnT iron ore was offered combiningly via two auctions out of which 35% (1.29 MnT) was sold. E-auctions were conducted on 04 & 10 Oct’16.

The total offered quantity of 3.7 MnT comprised of 2.71 MnT was ROM, 0.77 MnT was fines, 0.15 MnT was lump and 0.07 MnT was fines/lump. ROM offered had iron ore content ranging from Fe 27.6-62%, Fines- Fe 44-62% and lump – Fe 43-62%. Base price for both the the e-auction remained same at INR 500/MT across all material types & grades.

E-auction received good participation from exporters. Vedanta remains the largest bidder at 0.68 MnT followed by Kalinga Allied Industries (0.33 MnT).

Bidder-wise details in Oct’16 e-auctions

Bidder name

Fines Fines/Lump Lump ROM

Grand Total

Vedanta   1,930    –   18,880   658,880   679,690 
Kalinga Allied Industries  175,890   73,090   28,560   56,110   333,650 
Minescrape & Kadar Ores  77,630   –   2,320    –   79,950 
Sri Sri Paramhansa Yogananda Export  –   –   11,080   68,440   79,520 
Bagadiya Brothers   12,090   –   3,680   47,020   62,790 
Kai International  26,170       9,660   35,830 
V M Salgaocar and Brother  –   —   –   16,000   16,000 
Amit Earthmovers  –   –   –   8,900   8,900 
AS Exports and Imports      1,500     1,500 
Blueglobe exports  100   –   –   –   100 
Total  293,810   73,090   66,020   865,010   1,297,930 

Qty in MT
Source: SteelMint Research, Goa DMG

Highlights:

In the e-auction conducted on 04 Oct’16 majority of lots received flat bids except few lots. Lot of ROM (Fe 62.95%) located at Vagus jetty fetched bids at INR 1,420-1,430/MT. Another lot containing ROM (Fe 60.7%) located at Sircaim Jetty which fetched bids at INR 620/MT. Lots containing fines (Fe 55-57.7%) located at Surla jetty received bids at INR 720/MT.

In the e-auction held on 10 Oct’16, all the bids received were close to base price except few lots. Lump (Fe 57.08%) located at Advapal Mine received bid at INR 820/MT.

 

Korea: KOSPO Invites Tender for Purchase of 222,000 MT Coal

Korea Southern Power Co Ltd (KOSPO) has published a tender for purchase of steam coal of quantity 222,000 MT for Hadong Power Plants, South Korea. Bidders are requested to offer 222,000 MT quantity per year in lots of 74,000 MT on FOBT basis. The total contract period is of 3 years starting from Jan’17.

The supply of the shipment for the year 2017 is scheduled from Jan’17 to Mar’17 and the price terms shall be one single fixed number (USD) FOBT basis.

The offer given by the bidder shall be valid for the period of 3 business days from the date of tender closing. Although KOSPO can request the bidder to extend validity period of bid, if necessary.

Upon request by KOSPO, bidder shall provide relevant supporting documents including certificates, issued by the relevant authorities of the exporting country,
to demonstrate the legal status and current situation of the coal mine from which the coal would be supplied.

Specification

Total moisture (As received basis): 28% max
Fixed carbon (Air dried basis): 60% max
Ash (Air dried basis): 17% max
Net calorific value (As received basis): 4,600 kcal/kg min
Ash fusion temperature: 1,100°C

Note: Russian coal will not be allowed.

Due date

The due date for bid submission is 3 Nov’16 at 14:00 hrs (Korean Standard Time).